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What Do The Charts Tell Us?

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Louise Yamada, an influential chart technician, joined the panel to focus on the technical aspects of Friday’s sell-off and what it could signal.

Seven stocks were responsible for about 200 points of the Dow’s loss Friday, Yamada said. Pullbacks like this, where indexes retreat to their breakout levels, are normal but that doesn’t mean investors should become complacent. Watch for divergences, Yamada advised. If the major indexes pull back below July and March lows, “then we have something more serious,” she added.

Symbol
Price
 
Change
%Change
S&P 500
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But all declines are not equal. Yamada recommended buying stocks that have pulled back as long as they have strong uptrends with relatively good performance. She likes the lion’s share of tech, but feels financials and retail are still areas of worry. Those two sectors, she said, have broken their support levels and appear set for new declines.



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